Question

2. On 1st January, 2018, A, B and C enter into partnership contributing ₹ 2,50,000,₹ 130,000 and 1,20,000
respectively and sharing profits in the ratio of 5:3:2. B and C are entitled to a salary of ₹ 16,000 and ₹ 14,500 respectively per year. Interest on capital is allowed at 5% p.a. 5% interest is charged on
drawings. During the year, A withdrew 40,000, B ₹25,000 and C ₹15,000; interest on drawings being
A ₹2,250, B ₹1,125 and C ₹725. Profit in 2018 before the above mentioned adjustments was ₹71,400.
Show how the profit is distributed and also prepare the Capital Accounts, if they are fluctuating.​

Answer 1

Answer:

A, B and C enter into partnership contributing ₹ 2,50,000,₹ 130,000 and 1,20,000

respectively and sharing profits in the ratio of 5:3:2. B and C are entitled to a salary of ₹ 16,000 and ₹ 14,500 respectively per year. Interest on capital is allowed at 5% p.a. 5% interest is charged on

drawings. During the year, A withdrew 40,000, B ₹25,000 and C ₹15,000; interest on drawings being

A ₹2,250, B ₹1,125 and C ₹725. Profit in 2018 before the above mentioned adjustments was ₹71,400.